30 May 2020

Report into troubled NZTA department withheld

4:24 pm on 30 May 2020

The Transport Agency has refused to release an inquiry report into potential conflicts of interest over high-tech app contracts.

Accountant generic

Photo: 123RF

The inquiry began almost a year ago, after an earlier Deloitte inquiry found the agency's Connected Journeys unit had been allowed to run wild, with 'extensive disregard for processes'.

This latest inquiry focused on procurement processes, contracts and potential conflicts of interest around a fleet management app called Pre-use, and related apps put out by another agency unit, Zero Harm.

"These findings and any recommendations will be reviewed and fully addressed, and the report will be published in due course," the agency told RNZ last July.

But now the Transport Agency is refusing an RNZ request to release them.

It cited a section of the Official Information Act that provides a conclusive reason for "withholding information if the making of the information available would prejudice the maintenance of the law, including the prevention, investigation, and detection of offences, and the right to a fair trial".

As a result, it remains unclear what the inquiry found about what went wrong at the agency's two key units, if any recommendations have been made, and if the Transport Agency has now addressed these.

There was significant taxpayer investment in failed or problematic tech initiatives at the agency, particularly by Connected Journeys but also by Zero Harm.

Pre-use, a vehicle fleet management app released in 2015, was one of these projects. The Transport Agency has refused to provide details about it for a year.

The mismanagement of tech projects at the Transport Agency came to a head early last year when the agency was forced to disband Connected Journeys. The unit had been resisting the usual public sector oversight.

It was found to have 40 projects on the go, all funded only for the short-term and with no work plan, and with a lot of the work outsourced to contractors, thereby eroding the agency's own internal knowledge and intellectual property, governance minutes show.

Earlier inquiries reaching back as far as 2015 had found fault with some procurement processes which Zero Harm's manager Martin McMullan was central to, but then left it at that. A close friend of McMullan had been awarded one of the contracts.

Martin McMullan

Martin McMullan Photo: Supplied

McMullan was later promoted to head up the newly established Connected Journeys, which lasted just 18 months. His resignation in March 2019 prompted the agency to order an independent inquiry into Connected Journeys by auditor Deloitte.

Its report, released in mid-2019, found the unit grew from eight to about 100 staff - mostly contractors - and rode roughshod over public sector controls on governance, budgets, IT security and intellectual property.

After this came out, the agency ordered Deloitte to do another inquiry. This is the one it is now refusing to release.

"Please appreciate that the decision to withhold has been very carefully considered," the agency told RNZ.

McMullan left the agency to run a tech start-up called Frenzy which he set up in January 2019, while still heading Connected Journeys at the Transport Agency, Companies Office records show.

The company launched an app to let public transport commuters be paid to view marketing content during their ride.

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